By almost any measure, the U.S. solar market is on fire.
Installations of solar panels are expected to soar by a third this year, the price of solar power is now cheap enough to compete neck and neck with gas and coal-fired power in places like California, and the fledgling industry received a vote of confidence last week when President Obama announced a groundbreaking plan to curb power plant emissions.
Wall Street, however, has been dumping solar shares this year, largely on concern, which investors say is misplaced, that tumbling oil prices will sap demand for alternative energy, even though oil isn't used to generate power.
Stock prices are also suffering from an oversupply of new equity issues by companies raising capital to fund their rapid growth and concern an interest rate hike by the Federal Reserve could curb the appeal of their so-called yieldco units.
In the past year, six solar companies have gone public in the United States, raising a combined $1.85 billion, according to IPO ETF manager Renaissance Capital. The most recent two — SunRun and TerraForm Global Inc. — are both trading more than 20 percent below their IPO prices.
The carnage has intensified in the last two weeks.
The MAC Global Solar Energy index has dropped 36 percent since its 2015 high in April, with industry bellwether SunEdison Inc. having lost 55 percent of its value since July 20.
SunRun Inc., one of the top residential solar installers, went public last week at $14 a share and closed Thursday at $10.12.
Though solar is becoming mainstream, investors still view it as risky. It remains more expensive in most places than conventional power, so must rely on government subsidies and mandates that come and go.
"There are only so many buyers for these types of companies out there," said Robert W. Baird analyst Ben Kallo.